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Abstract:

A system for providing flight accident insurance at low price and fixed
coverage comprises means for limiting the number of policies that can be
sold on any given flight to not more than a predetermined number. The
predetermined number may be 20. The system comprises an input device for
receiving information from a traveler and an output device for providing
an insurance quote to said traveler.

Claims:

1. A system for providing flight accident insurance to a traveler, said
system comprising: a. a computer configured to accept an application for
said flight accident insurance from said traveler, said application
comprising a listing of a flight on said traveler's itinerary; b. a
computer configured to query a flight database to determine if flight
accident insurance is available for said flight, said availability being
confirmed if there is less than a first number of said flight accident
insurance policies already sold to other travelers for said flight; c. a
computer configured to receive confirmation of the availability of said
flight accident insurance for said traveler; d. a computer configured to
calculate a premium for said flight accident insurance; and e. a computer
configured to provide said premium and an offer of coverage to said
traveler.

2. The system of claim 1 wherein said first number is 20.

3. The system of claim 1 wherein said flight is operated by an operating
carrier and wherein said premium is a function of the GDP of the country
in which said operating carrier is domiciled such that said premium is a
decreasing function of said GDP.

4. The system of claim 1 wherein said computer configured to calculate
said premium comprises computer readable instructions for calculating a
minimum Risk Premium according to the equation: P * = d ( μ
+ Z ( 1 - α ) σ ) ( - γ ) n
##EQU00002## where P* is the Risk Premium per insured, d is the coverage
per insured, n is the number of insureds, μ is the average number of
insured deaths per year, Z.sub.(1-.alpha.) is the Z parameter for a
confidence interval of (1-.alpha.), σ is the standard deviation of
the number of casualties per year and γ is the time value of money
discount for the period from when the premium is received to when a claim
is paid.

5. The system of claim 4 wherein (1-.alpha.) is 90% and wherein
Z.sub.(1-.alpha.) is the Z parameter for a multinomial distribution.

6. The system of claim 1 which further comprises a Web Server and a Web
Server Cluster wherein said Web Server is configured to serve as an
extranet application portal and said Web Server cluster is configured to
serve as an insurance booking engine such that said premium and said
offer of coverage can be provided in real time to said traveler.

7. The system of claim 1 wherein said flight database comprises a listing
of all airlines offering said flight such that said number of policies
already sold is the sum of all policies sold to travelers booking under
each said airlines.

8. The system of claim 7 wherein different airlines and different flight
numbers will be considered to refer to the same flight if: a. the
different airlines belong to the same alliance; b. the departure airports
and arrival airports are the same for each of the different airlines and
different flight numbers; and c. the departure times are within 5 minutes
of each other.

9. The system of claim 1 which further comprises a computer configured to
update said number of policies sold for a given flight after an insurance
policy is issued such that conflicts due to simultaneous bookings by more
than one traveler are avoided.

10. The system of claim 1 which further comprises a computer configured
to cede a portion of the risk of said insurance policies to a reinsurer
and wherein said portion is 90% or greater.

11. The system of claim 1 wherein said computer configured to provide
said premium and an offer of coverage to said traveler further comprises
one or more of a workstation in communication with the Internet or a
mobile device.

12. A method for offering flight accident insurance to a traveler, said
method comprising the steps of: a. accepting by a computer an application
for said flight accident insurance from said traveler, said application
comprising a listing of a flight on said traveler's itinerary; b.
querying a flight database to determine if flight accident insurance is
available for said flight, said availability being confirmed if there is
less than a first number of said flight accident insurance policies
already sold to other travelers for said flight; c. receiving
confirmation of the availability of said flight accident insurance for
said traveler; d. calculating a premium for said flight accident
insurance; and e. providing said premium and an offer of coverage to said
traveler.

13. The method of claim 12 wherein said premium is a fixed premium.

14. The method of claim 13 wherein a Risk Premium is calculated, said
Risk Premium is used to calculate a final premium and wherein said
premium is set equal to said final premium if said final premium is
greater than said fixed premium.

15. The method of claim 14 wherein said flight comprises two connecting
flights and wherein said final premium is calculated based on the sum of
the calculated final premiums of each of said connecting flights.

[0003] A portion of the disclosure of this patent document contains
material to which a claim for copyright is made. The copyright owner has
no objection to the facsimile reproduction by anyone of the patent
document or the patent disclosure, as it appears in the Patent and
Trademark Office patent file or records, but reserves all other copyright
rights whatsoever.

[0004] The airplane logo shown as item 510 in FIG. 5 is a trademark of
Flightsurance Gmbh.

BACKGROUND

[0005] There is a long felt need for affordable flight accident insurance
to cover the risk of accidental death, injury, and/or dismemberment
caused by an airline accident, such as a crash. Passengers need to be
covered while boarding an aircraft, traveling on said aircraft, and
deplaning from said aircraft.

[0006] As currently offered, however, flight accident insurance is very
costly. Typical premiums for a one way flight are $50 per flight for
$1,000,000 coverage. Additionally, many insurance carriers limit their
exposure to $10,000,000 per incident for all insureds. If a flight had 20
insureds on board and all 20 perished in an accident, their beneficiaries
would only get $500,000 each ($10,000,000/20) instead of the full
$1,000,000 of coverage listed on the policy. In an extreme case where a
full jumbo jet had 300 insureds on board, their beneficiaries would only
receive $3,333 each ($10,000,000/300).

[0007] The primary reason for insurance companies limiting their total
exposure per flight is the cost of reinsuring the "catastrophic risk"
associated with the very rare event of a flight crashing with a large
number of insureds on board. If there were roughly 10 million flights per
year and roughly 10 million flight accident insurance policies sold, then
the average number of insured persons on any given flight would be 1. If
these persons were randomly distributed, then some flights might have 2
or 3 insureds and some wouldn't have any. The probability of any flight
having 10, 20 or more insureds would be exceptionally small.

[0008] Insured persons, however, are not distributed randomly. A family,
sports team, or other group of people may purchase flight accident
insurance as a group. Hence some flights might have exceptionally large
numbers of insureds on board. If one of these flights were to crash, then
the insurance company's exposure would be very large. Hence insurance
companies must limit their exposure and charge a very large premium to
cover the catastrophic risk of a flight with a large number of insureds
on board crashing.

[0009] Limiting coverage to a fixed amount for all insureds on board,
however, is misleading to the individual insureds that buy coverage. Each
one thinks that he or she is purchasing $1,000,000 in coverage, but in
fact, that coverage may be dramatically less if a large number of fellow
passengers are similarly insured and there is no way for an insured to
know how many others on board are insured. Hence there is a long felt
need for low cost flight accident insurance with a benefit that insureds
and their beneficiaries can count on irrespective of how many other
insureds are on board.

SUMMARY OF THE INVENTION

[0010] The Summary of the Invention is provided as a guide to
understanding the invention. It does not necessarily describe the most
generic embodiment of the invention or all species of the invention
disclosed herein.

[0011] FIG. 1 compares the prior art (FIG. 1A) with an embodiment of the
present invention (FIG. 1B). FIG. 1A illustrates the prior art where a
large number of insureds 104 are on the same flight 102. Each believes
that they have full coverage when, in fact, their coverage is diluted by
the other insured passengers on the same flight. The maximum number of
insureds may be the full capacity of the plane (e.g. 300).

[0012] FIG. 1B illustrates the present invention where the maximum number
of insureds 114 covered by a given insurance company, on a given flight
112, is limited to a small number, such as 20. By limiting the number of
insureds, each insured is guaranteed to get full coverage in case of an
accident and the insurance company does not have to charge enough premium
to cover a crash of a full plane load of insureds. Thus said insureds can
be confident that, in the case of tragedy, the beneficiaries of their
policies will get the full coverage they purchased. (The beneficiary of a
policy may include an insured in case of injury of the insured and not
death.)

BRIEF DESCRIPTION OF FIGURES

[0013] FIGS. 1A and 1B show a comparison of the prior art and the current
invention.

[0014] FIG. 2 is a schematic of a system for performing the methods of the
current invention.

[0020] Persons of ordinary skill in the art will recognize that the
following disclosure is illustrative only and not in any way limiting.
Other embodiments of the invention will readily suggest themselves to
such skilled persons having the benefit of this disclosure. For example,
a person of ordinary skill in the art would understand that the actions
attributed to any given entity may in fact be carried out by one or more
separate entities under the employ or direction of said given entity.

Insurance Purchasing Process

[0021] FIG. 2 illustrates the technology-enabled information flow 200
between entities when flight accident insurance, according to the present
invention, is purchased.

[0022] An insurance agent 220 receives from a traveler 210 an application
212 for flight accident insurance. The insurance agent may be an
independent agent or broker (e.g. Flightsurance GmbH), a captive agent of
the insurance company underwriting the flight accident insurance (e.g.
QBE), a travel agency authorized to act on behalf of said insurance
company (e.g. easyJet.com), a web site, such as expedia.com, or other
entity which is similarly authorized to offer, underwrite, receive
payment for, and issue (or "bind") said insurance coverage.

[0023] The application comprises information about the insured, such as
name, and information about the flight, such as flight number, departure
time, travel dates, airline, departure and destination airport, etc.

[0024] The insurance agent then queries 222 a flight database 230 to
determine if there are one or more insurance policies available for the
flight in question. The database comprises flight identification
information, airline partners, and the number of flight accident
insurance policies already sold and/or remaining to be sold.

[0025] A given flight may have multiple airline-flight number designations
due to the fact that multiple airline partners may offer the same flight
under their own brand. Under a code sharing agreement, the airline that
actually operates the flight (the one providing the plane, the crew and
the ground handling services) is called the operating carrier. The
company or companies that sell tickets for that flight but do not
actually operate it are called marketing carriers or validating carriers.
The flight database, therefore, comprises a list of all of the different
designations of a given flight to reduce the chance of exceeding the
allowable number of insurance policies sold. Occasionally, the flight
data received does not indicate that a given flight is offered by
multiple airlines, when in fact it is. A check is done, therefore, to
identify flights offered by different carriers in the same alliance where
the flights have the same origin, the same destination and scheduled
departure times within a certain window of time. Flights with different
designations that meet these criteria are considered to be the same
flight and the total count of insurance policies sold for said flight is
set to the sum of the number of policies sold through each carrier. A
suitable window of time is 5 minutes. The time period can be as low as
one minute. Time periods of less than a minute tend to falsely indicate
that two flights are different, when in fact they are the same. Time
periods as high as 30 minutes can be used. Time periods greater than 30
minutes tend to falsely indicate that two fights are the same, when in
fact they are different.

[0026] The insurance agent then receives 232 flight data and insurance
availability data from said flight database indicating whether or not
additional insurance policies may be sold for the flight the traveler
inquired about. If none are available, then the insurance agent informs
the traveler and the transaction concludes without the insurance being
offered.

[0027] If there are policies available, however, the insurance agent then
queries 224 an airline database 240 to retrieve 228 airline data
regarding the airline, accident history, maintenance evaluation and other
parameters that can be used to calculate a Risk Premium of said flight.
"Risk Premium", as used herein, refers to the portion of an insurance
premium that is required to pay out expected claims. Risk Premiums
typically represent about 40%-60% of the total premium charged for a
property and casualty insurance product. The balance of the premium
comprises fixed costs, variable costs, commissions, and profit.

[0028] The insurance agent then passes the airline and flight data 226 on
to a premium calculation engine 250 that calculates a quote for the
premium for said flight.

[0029] The insurance agent then receives 252 the premium quote and makes
an offer 228 to the traveler. If the traveler desires the coverage, then
the insurance agent receives 214 an acceptance, which may include payment
of the premium. The agent then issues coverage 229 on behalf of the
insurance carrier or coverage is issued directly by the insurance
carrier.

[0030] After coverage is issued, the insurance agent then updates 227 the
flight database to indicate that one or more additional policies have
been purchased for the flight in question. Thus, when the present
insurance agent, or another insurance agent authorized to sell said
insurance, queries the database in the future, an accurate indication of
insurance availability will be available.

[0031] The entire transaction is preferably carried out in real time,
similar to the speed at which an airline reservation may be made on-line.
Methods similar to on-line booking engines are employed to reduce the
chance of accidental over selling of insurance policies due to multiple
parties querying the flight database at the same time (e.g. within the
time it takes to confirm availability and conclude a transaction.)

[0032] If a traveler has more than one flight in his or her itinerary,
then the agent checks the availability of insurance coverage for all
flights on the itinerary. If all flights are available, then insurance
coverage is offered. If not, then no offer is made. The entire pricing
and approval process occurs in real time.

Receiving Application Information

[0033] FIGS. 3, 4, 5, and 6 illustrate alternative technologies by which
an insurance agent can receive application information from a traveler.

[0034] FIG. 3 shows a view of a web page 300 whereby a traveler manually
inputs 302 flight information for one or more flights that he or she
wishes to purchase insurance coverage for. The web page may be presented
on a work station in communication with the Internet. The traveler enters
the information and then hits a "send" button to forward the information
to the agent. It can also be forwarded to the insurer.

[0035] FIG. 4 illustrates a travel confirmation email 400 that may be
forwarded to an agent by a traveler applying for coverage. The agent
employs an email crawler to review the email and automatically identify
and record the pertinent application information. The information
includes the address of the traveler 402, traveler's name 404 and flight
information 406. This method has the advantage of reducing the effort
required by the traveler to apply for coverage but still allows the
traveler to use his or her normal travel agent.

[0036] FIG. 5 illustrates a "+1 Click" option 500 that allows a traveler
to indicate his or her desire to apply for flight accident insurance
through an online travel booking service, such as expedia.com. The
traveler applies merely by clicking 502 an "add item" box in the offer
after they have input their flight, personal and payment information into
the travel booking service. Some jurisdictions, such as Germany, may
require two clicks. A first click may be required to indicate the desire
to apply for coverage and a second click may be required to indicate
acceptance of terms and conditions.

[0037] The offer may comprise a brief description of the coverage 504 that
may be hyperlinked to a more complete description of the terms of
coverage. It may also present a price quote 506 for the coverage. After
the traveler has indicated his or her desire to apply for the coverage,
the agent receives the appropriate information from the travel booking
service and binds the coverage.

[0038] There are a number of ways to integrate the product into a booking
service. These include: [0039] Fully integrated: Insurance is fully
integrated into a booking process using XML interface. The airline/travel
agency collects money and is reconciled with the insurance agent and/or
insurance company every month. [0040] Partially integrated: Insurance is
integrated into a booking process. An end user (e.g. traveler) is shown
the price. The transaction+payment is completed by the insurance agent.
During booking, complete data is passed to the insurance agent including
all flight details and payment information. The insurance agent processes
payment+sends a confirmation to the customer. [0041] Linked: A link is
provided from a booking confirmation page. If the user clicks on the
link, he or she is transferred to the insurance agent's website with as
much data as possible pre-filled. The user enters his or her credit card
number and completes the transaction. The insurance agent collects funds
via a payment gateway, like wirecard (wirecard.com) and pays commissions,
such as those to the airline, monthly.

[0042] FIG. 6 illustrates an exemplary layout of a flight accident
insurance policy offer 600 on a hand held device, such as an iPhone. The
traveler sends the application information to the agent by activating the
Buy Now button 602.

Risk Premium Calculation

[0043] Once an agent receives application information from a traveler and
availability of coverage is confirmed, the agent must calculate the Risk
Premium for the Traveler. Table 1 illustrates an exemplary method for
calculating the average Risk Premium for flight accident insurance.

TABLE-US-00001
TABLE 1
Risk Premium Calculations
Value
Overall Accidents
Number of passengers (USA + Europe + Asia) 1,850,000,000
Average number of casualties 318
Average casualty rate 0.000017%
Average Losses
Insurance coverage per insured $1,000,000
Average losses per insured $0.17
Number of insured passengers 6,000,000
Average number of insured deaths 1.03
Average total claims paid $1,030,000
Catastrophic Losses (No limit on number of insured
per flight)
Maximum number of insured per flight 300
Catastrophic losses for maximum number $300,000,000
Catastrophic loss per insured $50.00
Catastrophic Losses (Limited number of insured per
flight)
Maximum number of insureds per flight 20
Catastrophic losses for maximum number $20,000,000
Catastrophic losses per insured $3.33

[0044] There are typically 1.85 billion passengers on scheduled airline
flights in USA, Europe and Asia in a given year. Each time a person takes
off and lands it counts as one "passenger". If a single person takes two
flights, for example, it counts as two passengers. The average number of
airline casualties due to accidents each year is about 318. The average
casualty rate, therefore, is 0.000017% (i.e. 318/1,850,000,000 expressed
as a percent).

[0045] One method of estimating the Risk Premium is to set it equal to the
average losses per insured. The average losses per insured is equal to
the casualty rate times the insurance coverage. If the insurance coverage
is $1,000,000, then the average losses per insured is $0.17. The total
number of claims would be equal to the number of insureds times the
casualty rate. If there were 6,000,000 policies sold per year, then the
average number of insured casualties would be about 1. The total claims
paid would be about $1,000,000.

[0046] As indicated above, however, an insurance company must not only be
able to pay the average losses, it must also be able to pay the
catastrophic losses. A catastrophic loss is a rare but very severe event.
Table 1 goes on to show what the catastrophic losses might be if everyone
on a large jet (e.g. 300 passengers) had insurance and that jet crashed
with all insured passengers perishing. That single loss would be
$300,000,000. Spread out over 6,000,000 insureds, the associated Risk
Premium would be $50. This is comparable to what current flight accident
insurance policies cost.

[0047] In the current invention, however, the total number of insureds per
flight is limited to a small number, such as 20. Table 1 goes on to show
what the catastrophic losses would be if the number of insureds per
flight is limited to 20. The total loss would be $20,000,000. The loss
spread out over 6,000,000 insureds would be $3.33. This is much less than
what current flight accident insurance policies cost and illustrates how
this insurance can be priced much lower than currently available
coverages while still retaining the ability to cover catastrophic losses.

[0048] A more refined method of calculating catastrophic losses employs
the multinomial distribution. With the multinomial distribution, one
assumes that the probability of any given insured perishing is
independent of the probability of any other insured perishing. This
assumption becomes reasonable by virtue of the present invention's
limitation on the number of insureds on any given flight. Table 2
illustrates the result of a multinomial calculation.

[0049] The assumptions are that the probability of a given passenger dying
in a given year is 0.000017%, that there are 6,000,000 insured passengers
per year and the coverage for each insured passenger is $1,000,000.

[0050] The average number of insured deaths per year, therefore, is 1.03.
The multinomial distribution, however, dictates that in some years the
number of deaths will be more (e.g. 2, 3, 4 etc.) and in some years less
(e.g. 0). A measure of the variability in this number is the "standard
deviation" of the distribution. The standard deviation is a function of
the probability of a given death and the total number of passengers that
are exposed to the risk. When the probability of a risk is low and the
number exposed to the risk is high, then the standard deviation turns out
to be approximately equal to the square root of the average number of
deaths per year (i.e. σ=1.01=sqrt(1.03)). A typical range of
expected values of the number of deaths per year, therefore would be
between 0 and 2 for an average of 1.

[0051] For estimating catastrophic losses, however, we want to go beyond a
typical range of losses to a maximum range of losses. Multinomial
statistics indicate that for a "90% confidence interval", the maximum
number of insured deaths is equal to the average plus 1.28 times the
standard deviation. By 90% confidence interval, it is meant that 90% of
the time, in any given year, the number of casualties will be at or below
the indicated maximum level. The number 1.28 comes from the value of the
"Z" parameter for a cumulative distribution of 90%. Thus in this case,
the maximum number of insured deaths would be 2.35. The catastrophic
losses therefore would be $2,350,000. The catastrophic losses per insured
and associated Risk Premium would be $0.39. This number can be adjusted
on a present-value basis to take into account the discount rate between
when the premium is collected and when a claim is paid. The overall
equation for the Risk Premium then becomes:

P * = d ( μ + Z ( 1 - α ) σ ) (
- γ ) n ##EQU00001##

[0052] Where P* is the Risk Premium per insured, d is the coverage per
insured, n is the number of insureds, μ is the average number of
insured deaths per year, Z.sub.(1-α) is the Z parameter for the 90%
confidence interval (i.e. α=0.1), σ is the standard deviation
of the number of casualties per year and γ is the "time value of
money" discount for the period from when the premium is received to when
the claim is paid. For a discount rate of 5% per year and a period
between premium payment and claim payment of one month, γ=0.0042.
The Risk Premium calculated according to said equation represents a
minimum Risk Premium. A higher total premium may be charged according to
the requirements of the marketplace, such as the desirability of offering
a single fixed price.

Airline Effects on Risk Premium

[0053] Different airlines have different safety records. The Risk Premium
therefore, can be adjusted for different airlines. A simple and effective
method for adjusting for different airlines is to adjust the Risk Premium
according to the average GDP in the country that an airline is domiciled
in. The premise is that countries with higher GDPs will have newer planes
that are better maintained with more strict safety procedures and better
training programs. Hence their risk of crashes will be lower.

[0054] Table 3 presents exemplary Insurance Ratings and associated Risk
Premiums as a function of the GDP of the country that an airline is from.
The Risk Premiums increase with decreasing GDP until a lower threshold is
reached. When a country's GDP is below the lower threshold (e.g. $1,000),
then the insurance carrier may elect to not provide coverage (i.e. the
airline is "not insurable").

[0055] Alternatively, for lower grade airlines (e.g. C-F), the maximum
number of seats that can be insured on a flight might be reduced. A "C"
grade, for example, may have a maximum number of insureds per flight of
10 instead of 20.

[0056] A sliding scale of Risk Premiums versus number of insurance
policies sold per flight may alternatively be provided. The first 10
seats may have the standard Risk Premium, but the next ten may have a
larger Risk Premium to reflect the higher catastrophic risk exposure. The
sliding scale for Risk Premiums may also be applied to higher rated
airlines (e.g. A and B).

[0057] Airline specific adjustments can be made to the GDP based Insurance
Rating. Many airlines, for example, belong to an airline alliance.
Airline alliances include Star Alliance, Sky Team and oneworld. Airline
partners in an alliance may have their insurance rating increased a third
of a step relative to their GDP rating by virtue of the fact that their
safety standards must conform to the higher standards of their alliance.
An airline that had a GDP based Insurance Rating of A-, for example,
might have its rating increased to an A if it belonged to an alliance.

[0058] If a given flight is offered by multiple airlines each with their
own flight designation, then the Risk Premium for the flight is set
according to the airline that is the operating carrier. If the operating
carrier is unknown, then the Risk Premium is set according to which
airline has the lowest insurance rating.

Reinsurance

[0059] The insurance carrier need not bear all of the catastrophic risk.
At least a portion of the catastrophic risk, such as 30% to 90%, may be
ceded to a reinsurer. For example, if a carrier was exposed to a
$20,000,000 per year catastrophic risk, it might cede $10,000,000 of the
risk to a reinsurance carrier and retain $10,000,000 of the risk itself.
The annual reinsurance premium might be 5% of the coverage ($500,000).
Reinsurance can allow a carrier to sell more policies per plane. Up to 30
policies may be sold at a reasonable reinsurance premium.

Adjustments to Risk Premium to get Final Premium

[0060] The Risk Premium may be adjusted according to the specific
itinerary of a given traveler. If a traveler books more than one flight
for a given itinerary, then the total Risk Premium for the itinerary will
be equal to the sum of the Risk Premiums for each flight.

[0061] This is because the risk of crashing is proportional to the number
of takeoffs. About 95% of all crashes occur on takeoff or landing.

[0062] Additional Risk Premium may be charged for flights originating in
one continent or region and terminating in another continent or region.
Continents and regions include Europe, Africa, Asia, Australia, Oceania,
North America, South America, and Greenland. The addition to the Risk
Premium might be $1.

[0063] A fixed cost of insurance may be added to the total Risk Premium
for all flights in an itinerary. An exemplary fixed cost might be $2.

[0064] Finally a gross margin is added to the adjusted Risk Premium to
calculate the final premium that will be offered to the Traveler. A
suitable gross margin may be in the range of 60%-70%. Gross margin may
include commissions, profit and taxes.

Fixed Price Structure

[0065] It may be convenient to offer the insurance with a fixed price
structure. A suitable fixed price structure comprises a first fixed
price, a second fixed price and a variable price. A suitable level for
the first fixed price is $6.99. A suitable level for the second fixed
price is $9.99. These can be adjusted according to experience and
inflation.

[0066] If the calculated final premium for a traveler traveling one way is
between 0 and the first fixed price, then the coverage is offered at the
first fixed price. If the final premium is greater than the first fixed
price, then the coverage is offered at the calculated final premium.

[0067] If a traveler has two takeoffs in an itinerary and the scheduled
takeoff of the second flight is no more than 24 hours after the scheduled
arrival of the first flight (e.g. a connecting flight), then both flights
are considered a single one way flight. For example, if the first flight
has a calculated premium of $1 and the second flight has a calculated
premium of $2, then the premium charged will be the first fixed price,
$6.99. If, however the second takeoff is more than 24 hours later than
the first arrival, then each flight is considered a one way flight and
the premium charged will be the sum of two first fixed prices, $13.98
($6.99+$6.99).

[0068] If a traveler is traveling round trip, then the minimum premium
will be the second fixed price. Thus, if a final premium for a one way
trip is calculated to be $2, then the roundtrip fixed price will be
$9.99. "Round trip" can also be defined as any itinerary of three or more
takeoffs or any itinerary that includes a two or more landing at the same
airport.

Particular Machine for Implementation

[0069] FIG. 7 illustrates a particular machine or system for providing
insurance coverage. The system comprises a Primary Database 702 and a Hot
Standby Database 704. These databases may be physically housed on
database servers, in a secure hosting environment. The servers, such as
Dell PowerEdge Servers, required for the online transaction process, may
have speeds and capacities comparable to airline reservation systems.

[0070] As used herein a "system" may comprise one or more computers,
microprocessors, fixed memories, input devices, output devices and
computer readable instructions to receive digital data from said one or
more input devices, process said digital data and output said digital
data through said one or more output devices. One or more of said output
devices may be configured to produce a tangible output, such as a printed
document, sound, or image on a screen.

[0071] The databases housed on said database servers comprise airline
insurability ratings, partner profiles, insurance policy, and "static
data", such as airports, cities, countries, airlines and text. Dynamic
data, such as airline flight designations, are updated periodically, such
as daily. Real time data, such as actual flight insurance policies sold,
and the number of available policies on a given flight, are updated in
real time.

[0072] The Hot Standby Database is updated in real time so that it can be
immediately available should the Primary Database crash.

[0073] The hardware for presenting information to a potential insured,
receiving information from said potential insured, calculating an
underwriting decision, calculating a premium, receiving payment and
binding coverage comprises a Web Server 712 and a Web Server Cluster 714.

[0074] The Web Server executes relatively low computationally intensive
activities, such as Templates, Business Logic and Extranet Portal
Applications. The Web Server Cluster executes relatively high
computationally activities, such as XML and HTML templates, rules engines
and in particular, the insurance booking engine. The Web Server Cluster
may also communicate with an Online Payment Gateway 716 for processing
payments.

[0075] The Web Servers communicate to the Internet 722 through an
appropriate firewall 718. Said firewall represents a specific
modification to said server such that said insurance can be offered
securely. A potential insured might communicate through a Closed User
Group Extranet 724 (e.g. a travel agency) or through a Web Application
725 (e.g. easyjet.com) or mobile application.

[0076] The speeds and capacities of the computational systems are
scalable. As the user base grows, the capacity grows approximately
proportionally above a certain minimum overhead.

Insurance Regulation

[0077] One skilled in the art will recognize that insurance is a regulated
industry. One practicing the methods described and claimed herein will
want to maintain compliance with all applicable local, state and federal
regulations, to ensure that the insurance policy is properly presented to
the insured, premiums are properly approved, underwriting properly
occurs, all necessary regulatory approvals are in place, etc.

CONCLUSION

[0078] While particular embodiments of the present invention have been
illustrated and described, it would be obvious to those skilled in the
art that various other changes and modifications can be made without
departing from the spirit and scope of the invention. Any of the aspects
of the present invention found to offer advantages over the state of the
art may be used separately or in any suitable combination to achieve some
or all of the benefits of the invention disclosed herein.